Bitcoin hack and the dangers of online currency

December 10, 2013

An enormous theft of bitcoin, the growing online currency, has demonstrated the difficulty of recovering stolen web-goods.

Last week the (illegal) online marketplace Sheep Marketplace was shut down following a theft of 5,400 bitcoins (BTC), which converts to almost $5m, according to bitcoin-converter site Preev.

But according to The Guardian, the site had well over 5,400 BTC left. Some customers argued Sheep had almost 100,000 BTC when it closed its operation.

Sheep’s business practises aside, the case demonstrates the difficulty in finding online thieves; victims have attempted to trace large amounts of BTC in an attempt to find whoever hacked the site, to no avail.

The Guardian, which also details how BTC is transferred between online “wallets,” explains that the huge amount the victims were following “the result of Bitstamp, a popular exchange, shuffling its own funds,” putting the hunt effectively back to square one.

The case once again demonstrates the dangers of online currency; specifically, even if your BTC is not stolen directly, a corporation holding it could shut itself down and sever your link to the money.

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